Skip to main content

Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts

An Erratum to this article was published on 23 August 2017

Abstract

This paper examines the effect of environmental policies on technological innovation in the specific case of renewable energy. The analysis is conducted using patent data on a panel of 25 countries over the period 1978–2003. We find that public policy plays a significant role in determining patent applications. Different types of policy instruments are effective for different renewable energy sources. Broad-based policies, such as tradable energy certificates, are more likely to induce innovation on technologies that are close to competitive with fossil fuels. More targeted subsidies, such as feed-in tariffs, are needed to induce innovation on more costly energy technologies, such as solar power.

This is a preview of subscription content, access via your institution.

References

  • Barradale MJ (2008) Impact of policy uncertainty on renewable energy investment: wind power and PTC. USAEE working paper no. 08–003. Available at http://ssrn.com/abstract=1085063

  • Binswanger H (1974) A microeconomic approach to induced innovation. Econ J 84: 940–958

    Article  Google Scholar 

  • Brunnermeier SB, Cohen MA (2003) Determinants of environmental innovation in US manufacturing industries. J Environ Econom Manage 45: 278–293

    Article  Google Scholar 

  • Cameron AC, Trivedi PK (1998) Regression analysis of count data. Cambridge University Press, Cambridge, NY

    Google Scholar 

  • De Vries FP, Withagen C (2005) Innovation and environmental stringency: the case of sulfur dioxide abatement. CentER discussion paper #2005-18, Tilburg University, The Netherlands

  • Dernis H, Guellec D (2001) Using patent counts for cross-country comparisons of technology output. STI mimeo, Organisation for Economic Co-operation and Development, Paris, France (http://www.oecd.org/dataoecd/26/11/21682515.pdf)

  • Dernis H, Kahn M (2004) Triadic patent families methodology. STI working paper 2004/2, Organisation for economic co-operation and development, Paris, France

  • Dickson MH, Fanelli M (2004) What is geothermal energy?. Instituto di Geoscienze e Georisorse, CNR, Pisa

    Google Scholar 

  • Downing PB, White LJ (1986) Innovation in pollution control. J Environ Econ Manage 13: 18–29

    Article  Google Scholar 

  • Fischer C, Parry IWH, Pizer WA (2003) Instrument choice for environmental protection when technological innovation is endogenous. J Environ Econ Manage 45: 523–545

    Article  Google Scholar 

  • Griliches Z (1990) Patent statistics as economic indicators: a survey. J Econ Lit 28(4): 1661–1707

    Google Scholar 

  • Hair JF Jr., Anderson RE, Tatham RL, Black WC (1998) Multivariate data analysis. 5th edn. Prentice Hall, Upper Saddle River, NJ

    Google Scholar 

  • Hausman J, Hall BH, Griliches Z (1984) Econometric models for count data with an application to the patents–R&D relationship. Econometrica 52: 909–938

    Article  Google Scholar 

  • International Energy Agency (2004) Renewable energy—market and policy trends in IEA countries. IEA, Paris

  • International Energy Agency (2006a) Renewable energy: RD&D priorities, insights from the IEA technology programmes. IEA, Paris

  • International Energy Agency (2006b) Renewables information: 2006. IEA, Paris

    Book  Google Scholar 

  • International Energy Agency (2006c) Energy technology research and development database. IEA, Paris, France (http://data.iea.org)

  • International Energy Agency (2006d) Energy balances of OECD countries. IEA, Paris, France (http://data.iea.org)

  • International Energy Agency (2006e) Energy prices and taxes. IEA, Paris, France (http://data.iea.org)

  • International Energy Agency (2007) Global renewable energy policies and measures database. IEA, Paris, France (http://www.iea.org/textbase/pamsdb/grindex.aspx)

  • International Energy Agency (2008) Renewables information: 2008. IEA, Paris

    Book  Google Scholar 

  • Jaffe AB, Newell R, Stavins RN (2002) Technological change and the environment. Environ Resour Econ 22: 41–69

    Article  Google Scholar 

  • Jaffe AB, Palmer K (1997) Environmental regulation and innovation: a panel data study. Rev Econ Stat 79(4): 610–619

    Article  Google Scholar 

  • Jaumotte F, Pain N (2005) From ideas to development: the determinants of R&D and patenting. OECD economics department working paper #457, ECO/WKP(2005)44

  • Lanjouw JO, Mody A (1996) Innovation and the international diffusion of environmentally responsive technology. Res Policy 25: 549–571

    Article  Google Scholar 

  • Maddala GS (1983) Limited-dependent and qualitative variables in econometrics. Cambridge University Press, Cambridge

    Google Scholar 

  • Magat WA (1979) The effects of environmental regulation on innovation. Law Contemp Probl 43: 3–25

    Google Scholar 

  • Morgenstern R, Pizer W (2007) Reality check: the nature and performance of voluntary environmental programs in the United States, Europe, and Japan. RFF Press, Washington, DC

    Google Scholar 

  • Organisation for Economic Co-operation and Development (2003) Voluntary approaches for environmental policy. OECD, Paris

    Google Scholar 

  • Organisation for Economic Co-operation and Development (2008) OECD patent database. OECD, Paris

    Google Scholar 

  • Popp D (2002) Induced innovation and energy prices. Am Econ Rev 92(1): 160–180

    Article  Google Scholar 

  • Popp D (2003) Pollution control innovations and the Clean Air Act of 1990. J Policy Anal Manage 22(4): 641–660

    Article  Google Scholar 

  • Popp D (2005) Using the triadic patent family database to study environmental innovation. OECD Environment Directorate working paper ENV/EPOC/WPNEP/RD(2005)2, OECD, Paris, France

  • Popp D (2006) International innovation and diffusion of air pollution control technologies: the effects of NO X and SO2 regulation in the U.S., Japan, and Germany. J Environ Econ Manage 51: 46–71

    Article  Google Scholar 

  • Scherer FM (1982) Demand-pull and technological invention: Schmookler revisited. J Ind Econ 30: 225–237

    Article  Google Scholar 

  • Scherer FM, Harhoff D (2000) Technology policy for a world of skew-distributed outcomes. Res Policy 29: 559–566

    Article  Google Scholar 

  • Schmookler J (1966) Invention and economic growth. Harvard University Press, Cambridge

    Google Scholar 

  • United States Department of Energy (2007) Energy efficiency and renewable energy. News release on Jan 4, 2007. (http://www.eere.energy.gov/buildings/news_detail.html/news_id=10489).

References Used for Renewable Policy Variables

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Nick Johnstone.

Additional information

Statement: This paper has not been submitted elsewhere in identical or similar form, nor will it be during the first three months after its submission to the Publisher.

An erratum to this article is available at http://dx.doi.org/10.1007/s10640-017-0176-x.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Johnstone, N., Haščič, I. & Popp, D. Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts. Environ Resource Econ 45, 133–155 (2010). https://doi.org/10.1007/s10640-009-9309-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10640-009-9309-1

Keywords

  • Environmental policy
  • Innovation
  • Patents
  • Renewable energy
  • Technological change

JEL Classifcation

  • Q55
  • Q58
  • O34
  • O38